The Trump administration on Friday, March 20, issued a legislative framework for a single national policy on artificial intelligence. The goal is to create uniform federal safety and security guardrails and prevent states from enacting their own AI rules. Getting these measures approved and implemented could take several months, if not years. However, there’s one area that needs attention from Congress right now: helping Americans understand the risks in using AI tools when preparing their taxes.
With Tax Day — April 15 — fast approaching, some are encouraging taxpayers to utilize AI for tax preparation. However, even the legal chief for xAi, the company that developed Grok, says, “This/Grok is not tax advice.” The Ways and Means Committee or the full Congress should pass a resolution so that more Americans can become aware of this point, and they should do so soon.
A recent survey by Adobe found that 26% of Americans are likely to use AI for their tax filing this year — up from just 11% last year. The increased dependence on AI makes perfect sense.
PARENTS OF MORE THAN FOUR MILLION CHILDREN HAVE ALREADY CLAIMED THEIR TRUMP ACCOUNTS
Tax preparation can be — and often is — extremely complicated. The U.S. tax code now exceeds 4 million pages, according to the National Taxpayers Union. If you add in the Code of Federal Regulations that interpret and implement the tax code, there are an additional 12 million words.
No wonder 54% of Americans outsource their tax preparation to professionals, which results in $148 billion in out-of-pocket costs. And the time that’s lost to tax prep for self-filers — 7.1 billion hours — amounts to $316 billion in lost time.
AI, which can cut through so many mundane matters, seems tailor-made for tax preparation. But it’s not — even if X owner Elon Musk thinks otherwise.
As the New York Times put it in a recent article: “Don’t Trust A.I. to File Your Taxes.” The outlet tested four AI chatbots — Gemini, ChatGPT, Claude, and Grok — on eight fictional federal tax scenarios created by TaxSlayer, a tax-filing service. The chatbots were asked to calculate refunds or amounts owed, and they missed by an average of more than $2,000.
The Office of the Taxpayer Advocate within the IRS has warned that AI “may not be able to provide accurate answers to your complex tax questions” and “taxpayers should not solely rely on AI-generated tax advice.”
Column Tax, a tax filing platform, ran four 2024 tax returns through four AI models: Gemini 2.5 Pro, Claude Opus 4, Gemini 2.5 Flash, and Claude Sonnet 4. Their performance was underwhelming, with correct returns coming back only between 23% and 32.5% of the time. “Models are inconsistent in their calculations,” noted the authors. That inconsistency carried over to provisions such as the child tax credit and the earned income tax credit, both of which have complex eligibility requirements.
The Column Tax sentiments are echoed by other tax professionals. One such professional recently stated, “In some areas you’re blown away by how [AI] performs. But at the very next turn, it can give you an answer that is completely wrong.” The article pointed out that “AI can’t consistently provide accurate answers to tax questions and isn’t reliable when it comes to math calculations or interpreting complex issues like international, self-employment, and state tax law.”
AI’s shortcomings stem, in part, from the constant evolution in the tax code.
Consider the changes just from last year. There are new provisions on tips and overtime, standard deductions, child tax credits, and benefits for seniors. Some of these provisions can be applied to 2025, but not all of them. It’s not clear that AI tools can keep up with these changes.
An even more fundamental issue is that AI isn’t equipped to process how the array of forms found in a typical tax return informs one another, such as which form needs to be updated at which stage of the tax prep process.
Just one mistake in this mind-numbingly complex process can lead to wild inaccuracies in a tax filing. And blaming the error on AI isn’t going to win taxpayers any sympathy from the IRS.
The Adobe study cited above also found that 51% of Americans are stressed about filing their taxes (I’d like to know who the other 49% are). Their stress levels will rise considerably if they rely on AI to complete their tax filing — and get a notice from the IRS saying that their return includes errors.
IT’S TAX SEASON: HOLD THE IRS ACCOUNTABLE FOR MOVING COMPLIANCE GOALPOSTS
Congress — and the Ways and Means Committee in particular — would be doing a great public service by warning Americans about the risks of using AI in connection with their taxes.
We can all hope that AI will eventually improve to the point that it can be reliably used to calculate what we all owe in taxes. But it’s not there yet.
Oren Etzioni is Professor Emeritus of Computer Science at the University of Washington, where he helped to pioneer meta-search, online comparison shopping, machine reading, and open information extraction. He is the Founding CEO of the Allen Institute for Artificial Intelligence, a premier AI research organization founded by Microsoft co-founder Paul Allen to advance AI for the common good.
